Wednesday, August 11, 2010

Hey, Let's Listen To These Guys!

Fed Chair Alan Greenspan tells the New York Times all the Bush tax cuts should expire as scheduled, even those that benefit the middle class and not the rich. His reason: the nation's looming deficit requires it.

On Sunday, former Treasury Secretary Robert Rubin, appearing on CNN, says any further effort to stimulate the economy would be "counter productive," and that policy makers instead should craft a deficit-reduction plan.

. . .

In 1999, both Greenspan and Rubin urged Congress to repeal the Glass-Steagall Act that had safely separated commercial from investment banking. In 2000 they argued against allowing the Commodity Futures Trading Corporation to regulate derivatives. Until recently, Rubin ran the executive committee at Citigroup, whose excesses required a massive taxpayer bailout. In 2001 Greenspan supported the Bush tax cuts that blew a gigantic hole in the federal deficit and mostly benefited the wealthy. In 2002 he lowered interest rates to near zero but refused to oversee how banks were using their almost-free borrowings.

The reason that people still listen to these idiots is that people that 99% of reporting that quotes either Rubin or Greenspan doesn't mention anything from that last paragraph.

I’m not saying the Internet was fated to turn out the way it did, or that it necessarily would have led to economic growth. And I’m not saying the Clinton economic team had nothing to do with the creation of 23 million jobs during its tenure (while also setting the stage for the eventual financial crisis, it must be told). But surely they faced a far less daunting time than we did at the end of 2008. I remember hearing Bill Clinton say that the new Administration “can’t do things the way we did it,” and that’s right. But that hasn’t seemed to hit home with the neoliberals who are, as we now know, basically in charge of the Obama economic team.

So we get too-small stimulus packages, even before Congress gets their hands on them. And we get this rhetorical emphasis on deficit reduction, which started at the end of 2009, actually, in leaked trial balloons about the State of the Union, and which has fueled all the deficit talk from that point forward, to the extent that even no-brainer actions like extending unemployment during a time of crisis becomes agonizing. This stems completely from a worldview that says, essentially, protect the banks, and let nature take its course. Now we have banks making record profits, but nature has been cruel to everyone without a Wall Street address. And the Robert Rubins of the world don’t have the imagination, or the desire, to think of what to do in that situation.

I think that last part nails it on the head. While fucking up is a constant of Rubin's career, we really can't undersell the idea that some of these people just straight up don't care. When you listen to Ben Bernanke, Tim Geithner and Larry Summers talk about the economy these days, it's hard to not get the sense that they're living in a fantasy world.

But that's not quite the case, and I honestly think part of it that they can't comprehend just how awful things are outside of their bubble. Their buddies had some rough times for a few months in 2008 but they're doing just fine now.